In a sharply worded letter Wednesday, Blumenauer gave the secretary of
defense five days to produce details of KBR's claims of indemnification.
The details of a secret agreement have emerged in a U.S. District Court
case in Portland and were reported Tuesday in The Oregonian. Blumenauer
said he plans to take his concerns to colleagues on the House Armed
Services Committee.

Twenty-six Oregon
Army National Guard veterans who guarded KBR employees restoring
Iraqi oil production in 2003 are suing the contractor, claiming the
contractor knowingly or negligently exposed them to a cancer-causing
chemical. Another 140 Indiana National Guard veterans have filed a
similar suit.

KBR defends its conduct at the Qarmat Ali water-treatment plant, saying
it "was governed at all times by the terms of its contract with the
United States military."

Twenty-six Oregon
Army National Guard veterans who guarded KBR employees restoring Iraqi oil production in 2003 are suing the contractor, claiming the contractor knowingly or negligently exposed them to a cancer-causing chemical. Another 140 Indiana National Guard veterans have filed a similar suit.

KBR defends its conduct at the Qarmat Ali water-treatment plant, saying it "was governed at all times by the terms of its contract with the United States military."

But during a June 22 deposition in the Portland case, Chris Heinrich, a Texas attorney for KBR, revealed his company had performed contingency planning in 2002 that identified hazards in the Iraqi oil fields, well before the invasion.

After KBR had signed its no-bid Restore
Iraqi Oil contract and as the coalition invasion was taking place in March 2003, Heinrich said he went to the Pentagon himself to demand immunity for KBR's restoration work. Heinrich told Army officials that KBR refused to do the job unless granted "broad coverage." KBR required that the U.S. Treasury -- taxpayers and not the contractor -- pay for any property damage, injury or death of any soldier or civilian working at a KBR site. That applied even if the harm resulted from KBR negligence.

"We proposed some language that we preferred to have in terms of the indemnification," Heinrich said, adding that the agreement was typed up during that single meeting with an Army attorney. Heinrich said an amended contract was signed shortly afterward by the secretary of the army -- at the time Tom White -- or someone at the "secretariat level."

Despite seven years of war and months of discovery in the U.S. District Court case in Portland, that clause remained secret until Heinrich's testimony under oath.

A furious Blumenauer sent a letter to Gates, saying, "I am deeply concerned that the Department's contracts appear to leave the U.S. service members doubly exposed: first to the unsafe environment created by these contractors and second as taxpayers potentially paying for the legal defense of the very contractors causing harm."

KBR, which in 2007 split from its parent company, Halliburton, maintains in press releases that the Iraqis left the cancer-causing chemical and "immediately after we became aware of potential contamination ... KBR began working with the military to conduct air and soil testing at the site and posted signs in English and Arabic to advise of the presence of the chemical." KBR said that U.S. and British forces at the Qarmat Ali plant also performed "a multitude of medical and environmental tests in 2003 and concluded that there were no long term health risks associated with the soldiers' brief exposures."

"It is apparent that since the plaintiffs cannot sue the Army, they are instead taking action against KBR."

Dozens of National Guard soldiers claim lung, stomach and skin problems as a result of guarding KBR civilians at Qarmat Ali. Two Indiana soldiers and one Oregonian who served there have since died of cancer.

Blumenauer also asked for a list of contractors with similar indemnification and whether Congress was ever notified. He told The Oregonian that downsizing the military and outsourcing to private contractors has been costly.

"We now have more civilian contractors in Afghanistan than we have soldiers," Blumenauer said. "That has been used to hide the scale of the activity and do war on the cheap. But as we look back, there are lots of hidden costs, including the safety and the well-being of our soldiers."

In the Portland case, Oregon veterans await a decision by U.S. Magistrate Judge Paul Papak who is considering KBR's second motion to dismiss.